The London congestion charge, the signature policy of the former mayor Ken Livingstone, is losing its battle against gridlock after Transport for London admitted the capital's streets are as congested as they were before the levy was introduced.

Pedestrians are expected to bear some of the consequences of the fightback against lengthening tailbacks, with pedestrian schemes facing the axe and experts calling for shorter crossing times at traffic lights. The London mayor, Boris Johnson, said this morning he would take action on roadworks and allow motorbikes in bus lanes in an effort to reverse the tide of congestion.

TfL's report today will give ample ammunition to opponents of the congestion charge, particularly those who criticised its extension to west London last year. It said gridlock in the congestion zone was as bad as it had been before February 2003, when the measure was first introduced, and there had been no improvement in the western zone since it was rolled out there.

Johnson said: "I have always thought that the congestion charge is a blunt instrument. It has proved successful in cutting traffic coming into London but on its own has not resolved the problem of congestion. Various works and schemes going on in the capital have also eroded its impact. I am therefore introducing a more comprehensive approach to easing congestion in London."

The mayor said he would use new powers to force utility companies to apply for permits before starting roadworks, and announced the scrapping of a plan to pedestrianise part of Parliament Square in Westminster. Traffic light signals will be "rephased" - or left on green or red for longer periods of time - to encourage smoother traffic flows.

Congestion charge backers, including senior TfL managers, argue that traffic would be even worse without the scheme, which levies fees on drivers entering central London between 7am and 6pm on weekdays.

Professor Stephen Glaister, a transport specialist at Imperial College London and a former TfL board member, said the report was "no surprise" because congestion had been inching back to 2002 levels for several years.

"Congestion would be a lot worse were it not for the charge," he said. "TfL needs to manage the roadworks better, which is plainly possible. Traffic lights can also be rephased by giving less green time to pedestrians and more to traffic."

According to TfL, cramped road space is the biggest congestion menace on London's streets. It said 70,000 fewer cars entered the original charging zone last year compared with 2002, with 30,000 fewer entering the western zone. But gridlock has increased because the reduction in road space has been even greater.

"Without the congestion charge the traffic problems in London would be much worse. However, as a result of other interventions such as utility and construction works, the reduction in road space has had a detrimental impact on congestion levels and is slowing traffic down," said Malcolm Murray-Clark, the TfL executive who introduced the scheme.